Which of the Audit Procedures Listed Below Would Be Least

question 1

Multiple Choice

Which of the audit procedures listed below would be least likely to disclose the existence of related-party transactions of a client during the period under audit?

• A) Reading 'conflict-of-interest' statements obtained by the client from its management.
• B) Scanning accounting records for large transactions at or just prior to the end of the period under audit.
• C) Inspecting invoices from law firms.
• D) Confirming large purchase and sales transactions with the suppliers and/or customers involved.

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Definitions:

Production Function

A mathematical equation that describes the relationship between the inputs used in production and the output of goods or services.

Price System

An economic system wherein the allocation of goods and services, as well as their prices, are primarily determined by supply and demand in a free market.

Market Economy

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.

Rate Of Economic Growth

The increase in the market value of the goods and services produced by an economy over time, usually measured as the percentage increase in real gross domestic product (GDP).